Google: Tech's Most Successful Failure

NEW YORK ( TheStreet) -- In one respect, you can't argue with Google's ( GOOG) success.

When a brand becomes a verb, it's got something going on.

Although it's a somewhat diversified revenue stream, Google derives almost all of its revenue from advertising. This could end up being a problem.

Think about it. As traditional Web surfing slows and people turn to apps and mobile devices for information, search becomes less common. The still-growing app ecosystem greatly reduces reliance on search. Even a small decline in search hurts Google.

Plus, most of Google's ads stink anyway. They're one step up from spam.

He's sharp to point out Siri's encroachment on Google's search turf. And, as Jackson notes, Siri is only a Beta product! He covers the search/mobile issues well.

Few people focus on another fundamental flaw with Google.

Google's ecosystem stinks. It doesn't make money off of anything it does, outside of advertising.

Google beat Yahoo! ( YHOO) because it set up a better advertising network.

From a content standpoint, Yahoo! outclasses Google.

Yahoo! digitized a concept old-time radio created: Give us 22 minutes and we'll give you the world.

As CEO Marissa Mayer referenced on the company's recent conference call, Yahoo! must do a better job capitalizing on user behavior. Yahoo! is a "daily habit" for many -- rolling seamlessly from news to sports to finance to entertainment. Yahoo! needs to monetize that loyalty in more ways than one.

Google also loses -- to Apple ( AAPL) and Amazon.com ( AMZN) -- when it attempts to tie together hardware, software and/or e-commerce.

It's easy to make sense of what Apple and Amazon do and why they do it, as an investor and a consumer.

Sure, Google's ad network is straightforward enough, but there's no coherent backup plan. What's the strategy with its disparate offerings? Where, other than via ad clicks, has Google set itself up to generate meaningful revenue?

It has a music service. It has email. It has docs. It has YouTube. It has a tablet. It has a cloud offering. It will probably do a smartphone. It's selling a $249 laptop. It will probably sell a pair of smart glasses soon.

Google makes nothing off of any of this unless you click an ad while working within one of these platforms.

It would have scant mobile market share if it didn't give Android away for free.

What does Google need to do?

Focus.

Pick something and make it the core offering. Maybe YouTube. Tie it in with Google Plus.

Because right now, Google Plus sits idle with a whole bunch of people joining "circles" and "+1'ing" stuff, but that's it. Integrate it with YouTube, make it all very mobile and social, throw in an e-commerce component, find some other ways to make money and focus.

It's great to tinker. There's nothing wrong with hobbies. But, the search and ad model is changing. It doesn't seem as if Google is evolving alongside this shift.